Noriba's RaMI trumps 'normal' murabaha

The murabaha market has been suffering from low return rates, averaging 0.9%. Noriba Bank in Bahrain has introduced a product, Range Murabaha Investments (RaMI), that projects returns beyond 'normal' murabaha investments of about 10% per year. Clients have been seeking greater yields and value-added liquidity management structures for investments extending over a longer time period. Profits earned by murabaha trades that occur during the investment period are paid to the investor, with the original amount reinvested. Noriba offers clients control over the degree of risk-taking and spread of investment. The greater risk of RaMI is offset by the capital preservation of the UBS group, to which Noriba is a subsidiary. RaMI is a rare example of financial engineering innovation in an otherwise overly-cautious Islamic banking culture.